Incentives Helped Deal Fly

Nn Offered Loan, Low Rent To Valujet

Newport News agreed to give ValuJet Airlines Inc. a low-interest loan, to renovate part of the city's vacant airport terminal and to lease it to the company cheaply.

In return, the low-fare, short-haul carrier agreed to give the city 450 customer-service jobs and a guarantee it will fly into the Peninsula airport through the turn of the century.

ValuJet announced Friday that it will invest $1.5 million to turn 20,000 square feet of the city's vacant terminal into its third and largest reservations center by next month.

``This was a business deal. It was an outstanding business deal,'' said Marcia H. Scott, ValuJet communications coordinator.

While the details of the package aren't final, ValuJet agreed to pay the Peninsula Airport Commission about $600,000 over the next five years to rent the space, commission Chairman David Mercer said.

That translates to roughly $6 a square foot annually, Mercer said. The average rate for similar office space on the Peninsula is about $11.50 a square foot, according to one local commercial real estate agent.

Mercer said he hopes that at the end of the five-year lease ValuJet will not only opt to stay at the airport but will move into a new facility at a planned 100-acre aviation research park that airport officials hope will attract high-tech companies and high-paying jobs.

``This is sort of a make-do situation here,'' Mercer said.

The commission will spend roughly $300,000 to add walls and install furniture and equipment to transform the terminal into a customer service center, Mercer said. That work could begin as early as next week.

``This was an empty space that was not making revenue,'' he said. ``It was an underutilized facility.''

To sweeten the deal, the Newport News Industrial Development Authority agreed to issue ValuJet a $1.5 million revenue bond - essentially a low-interest loan - to pay for computers and other equipment in the facility. The company will pay off the debt over the next five years.

It all comes just six months after Newport News agreed to give the airline $1.8 million over 2 1/2 years - or payments of roughly $60,000 a month - to begin passenger service at the Peninsula airport.

Under that agreement, ValuJet guaranteed it would offer at least two jet flights out of the Peninsula each day until the end of 1998.

As part of the deal announced Friday, ValuJet extended that agreement, guaranteeing it would add a third flight daily through 1997 and have at least one through the end of the year 2000, Mercer said. In return the city agreed to pay ValuJet an additional $10,000 monthly, bringing the total possible subsidy for flight service to $2.4 million.

The airline currently offers four flights to Atlanta out of the airport most days. ``We hope there will eventually be a northbound flight,'' IDA Chairman John Munick said.

ValuJet hired TAD Aviation Services, a division of Massachusetts-based TAD Resources International, to run the reservations center for the first three years, Scott said. The company plans to hire 200 full- and part-time employees by the middle of February - most earning $5.75 to $6 an hour - and possibly up to 450 people by July.

The Newport News workers will answer 15 to 20 calls each hour from people looking to book a flight on the rapidly-growing airline, said Tim Duggan, mid-Atlantic manager for TAD Aviation.

The center will be ValuJet's third, Scott said. The company's existing centers - its original facility in Atlanta and an 11-month-old center in Savannah, Ga. - employ 500 people each and, combined, answer up to 60,000 calls a day.

That number will grow as the 2-year-old airline adds destinations to its route, which it plans to do this year, Scott said.

ValuJet does not participate in the airline reservation services that travel agents use, company executives have said. As a result, anyone who wants to book a flight - including travel agents - must talk to a representative at one of the company's reservations centers.

* Pay: $5.75 to $6 an hour for entry-level positions. Some supervisors could earn up to $10 an hour.

* Perks: Employees and their families qualify for flight vouchers on ValuJet planes.

* To apply: ValuJet will hold an open house at the airport Jan. 19 and 20. Applicants should bring a resume and must have at least a high school diploma or a general equivalency certificate to qualify. Or, send a resume to 827 Diligence Drive, Suite 100, Newport News, Va. 23606.